SK Communications Co., South Korea‘s third-largest Internet portal service provider, is in an early stage of merger talks with the developer of South Korea’s most prominent social network service, sources said Monday.

SK Communications, which operates Cyworld, once South Korea‘s most prominent social networking service, is seeking to merge with Kakao Corp. that operates a namesake mobile messenger service, several financial sources in Hong Kong confirmed.

The move could possibly lead to the formation of a new SNS powerhouse in South Korea.

SK Communications is the Internet business unit of SK Telecom Co., South Korea’s largest mobile phone operator with some 20 million subscribers.

Last Tuesday, the company announced plans to reclaim its past glories.

It said it will launch a redesigned mobile service aimed at transferring more visitors to its waning Cyworld, a Facebook-alike site.

Meanwhile, Kakao Talk is unarguably the most-used mobile messenger in South Korea, so far luring 35 million domestic users.

In addition, it claims 21 million users located abroad.

Free-of-charge mobile messenger Kakao Talk was first released in March 2010, rapidly replacing small fee-charged text messages for smartphone users in the country.

Its rise has threatened to eat into the profits of mobile carriers, including SK Telecom, the parent company of SK Communications.

Despite market speculations on the company going for an initial public offering, Kakao did not debut on a stock market.

SK Communication‘s shares were trading at 13,450 won at 12:30 p.m. Monday, up 14.96 percent from the previous session’s close. (Yonhap News)